The present invention is of a system and method for automated and semi-automated contract formation, and in particular, for automated negotiations which lead to the construction of a contract between two parties.
E-commerce (electronic commerce) is an increasingly popular type of business activity. The term “e-commerce” refers to business activities conducted through the Internet, and in particular through Web sites on the World-Wide Web (WWW). The amount of merchandise sold on the World Wide Web is constantly growing, including products and services which range from the delivery of flowers to the purchase of books and computer hardware. The current architecture for e-commerce on the Web mainly relies upon a Web page-based interface, which is navigated by using the Web browser of the user. Such an architecture has several disadvantages.
First, each vendor must establish a separate, non-standardized, Web site. Therefore, each vendor must rely upon its own technology and non-standardized interface, which is inefficient and time consuming for the vendor. Second, the requirement to navigate through Web sites with a Web browser is inefficient for the user, or potential customer, who may wish to consider only specific products and/or services. Third, there is no standard for conducting automatic negotiations in either business-to-business (B2B) or business-to-consumer (B2C) settings (some sites do offer ad-hoc negotiations, for example “Hagglezone” [http://www.hagglezone.com as of Jan. 2, 2000] and to a limited extent “Priceline” [http://www.priceline.com as of Jan. 2, 2000]. In addition, there are also auctions which offer a form of negotiation as in “eBay” [http://www.ebay.com as of Jan. 2, 2000]). Fourth, there are no facilities and standards for conducting negotiations on package deals, such that most commerce is on single items or a collection of items (also called a basket or a shopping cart) in which each item is considered in isolation (for example http://www.buywiz.com).
One attempted solution to these problems is the provision of automated agents, known as “shopbots”, which navigate through a plurality of Web sites in an attempt to locate products and/or services which fit certain parameters specified by the user. For example, such an automated agent may optionally be used to locate a product within a certain price range. Although the automated agent enables the user to consider products from a plurality of Web sites according to one or more specific criteria, the user is still required to navigate through the Web site of the vendor in order to actually purchase the product. Examples of such automated agents include “R U Sure” [http://www.rusure.com as of Jan. 2, 2000], and “BuyWiz” [http://www.buywiz.com as of Jan. 2, 2000] which are agents for buying goods, as well as various types of information brokers, which retrieve information about products and services through the Internet [1]. Such systems are generally task-oriented and do not define a general framework for negotiation. Thus, this attempted solution does not address the previously described disadvantages.
Other examples of attempted solutions for the specific problems of negotiation are described in “Agents as Mediators in Electronic Commerce” [2]. For example “AuctionBot” describes an automated auction server, which permits the seller to select from various predetermined protocols for conducting an auction. However, the protocols cannot be flexibly determined during the auction itself. Similarly, “Kasbah” is a Web-based multiagent classified ad system which offers very limited negotiation features, related to the rate with which a buyer increases a bid to a seller over time. “Tete-a-Tete” is a system which provides more flexibility, in that terms other than price can be negotiated, but the negotiation features which are provided are still very limited.
A more preferred solution would provide automated or semi-automated processes for e-commerce, which are still sufficiently flexible to meet the needs of users. These processes would require that the Web sites of vendors become machine-interactable, or capable of interaction with automated tools (software programs). In addition, these Web sites should become machine-analyzable, or capable of being analyzed by these automated tools. The machine-interactability and analyzability properties of these Web sites would enable the process of e-commerce to become automated or at least semi-automated, thereby becoming more efficient and simpler for the user to operate. Furthermore, the automation or semi-automation of these processes would enable the user to locate vendors of interest more quickly, and with a greater likelihood of successful matching between the needs of the user and the characteristics of the vendor.
One attempt to provide such a solution is described in an article by S. Bottcher [3], which addresses the need for searching for a business partner in a distributed electronic market. This article discloses the use of a static tree in order to match potential customers to vendors of interest. The advantage of the static tree is that it provides greater flexibility than simple string-based matching, such as that performed by many Internet search engines. The disadvantage of the static tree is that it cannot be used for negotiations or for dynamic matching, since the tree itself cannot be adjusted. Since interactions between a potential customer and a vendor are typically a dynamic process, in which the vendor provides a description of available goods and/or services, and the potential customer then considers whether to make a purchase from the vendor, the use of a static tree is ultimately limiting.
A more useful approach would involve the use of dynamic trees which can be adjusted, or even created, “on the fly” during the course of the negotiations. The trees are only partially defined for initiating the process of negotiation. As the process continues, the trees are constructed, thereby enabling the process of negotiations to be conducted flexibly and dynamically. Furthermore, these data structures enable the ultimate resolution of the process of negotiation to be expressed as a contract, since the dynamically constructed trees are then converted into a language-based description. Unfortunately, such a solution is not available.
There is thus a need for, and it would be useful to have, a system and a method for automated or at least semi-automated, dynamic negotiation between a potential customer and a vendor, in which the Web site of the vendor is capable of interacting with software-based automated tools, and in which the process of negotiation involves the construction of a tree “on the fly”, which can then be expressed as a natural language-based description for the determination of a contract between the parties.